Since Cuba went communist, the Castro dictatorship simply took all the money from domestic state-run companies and distributed the assets as it saw fit. Well, looks like the socialist Kleptocracy finally ran out of state-run businesses to squeeze.
Most Cubans have not paid taxes for half a century, but that will change under a new code starting January 1.
The landmark regulations will change the relations of Cubans with their government and are a signal that market-oriented reforms, launched since President Raul Castro succeeded his brother, Fidel Castro, in 2008, are here to stay.
The recently published code constitutes the first comprehensive taxation in Cuba since the 1959 revolution abolished just about all taxes.
In the 1990s after the collapse of the Soviet Union, the country’s main benefactor, the Cuban government imposed a few scattered taxes, but mostly preferred to maintain low wages so it could fund free social services.
The government’s free market reforms introduced over the last two years, are designed to encourage small businesses, private farming and individual initiative, along with plans to pay state workers more. Under the new tax code the state hopes to get its share of the proceeds.
What??? Over 50 years of communist dictatorship confiscating all the proceeds it wanted, and Castro Part II “hopes to get his share”. Trust me, if Raul doesn’t think they’re sharing enough, he’ll take what he wants.
……The government also envisions replacing subsidies for all with targeted welfare, meaning that the largely tax-free life under a paternalistic government is on its way out.
“This radically changes the state’s relationship with the population and taxes become an irritating issue,” said Domingo Amuchastegui, a former Cuban intelligence analyst who lives in Miami and writes often about Cuba.
The new code covers 19 taxes, including such things as inheritance, environment, sales, transportation and farm land, various license fees and three contributions, including social security.
A sliding scale income tax – from 15 percent for earnings of more than 10,000 pesos (about $400) annually, to 50 percent for earnings of over 50,000 pesos, (about $2,000) – adopted in 1994, remains in the new code for the self-employed, small businesses and farms, but it also includes a series of new deductions to stimulate their work.
The average wage in Cuba for everyone—whether doctor or laborer— is about $20 a month. Since Cuba isn’t known for being an open economic market, good luck with the new tax code.
“But here we face two problems. On the one hand we are not used to paying for anything and on the other our wages are so low we can’t spare a single peso,” she said.